One year ago today: December 28, 2022, a generic day.
Five years ago today: December 28, 2018, learning plumbing.
Nine years ago today: December 28, 2014, my stance is . . .
Random years ago today: December 28, 2008, A rare New Year's gig.
A drizzly morning is my cue to get indoor work accomplished. The computer shop reports the problem with the Compaq is the power supply. Those are an interesting form factor, the supply is built into the motherboard. Meaning it is not worth repairing. I have no idea why computers these days go bad like that and tend to blame it on Windows. Show a computer with a problem that’s too expensive to fix, and I’ll show you a computer with Win 7, 10, or 11 on it. So here you see what I built up today, a 386 with good old trusty, reliable, always works Win XP on it. This picture show the best I can muster with what’s left of my computer shop equipment.
Usually after Xmas you get some excellent older units so I asked them to keep an eye out for me. Simply the best unit that will install XP and drive this monitor. Gamers are always like, duh, why do you want XP, but cash money always let’s them see the light. One option I’ve considered is Classic Shell if it would only work right. It’s a downloadable app you can make other versions of Windows act like XP. Intended for offices who don’t like having to retrain their staff as often as MicroSoft would have them, it is an overly but it never quite gets it right. And it does not have a setting for Apples.
It was not busy and the shopowner was there, we had a twenty minute conversation. He got into the business about the time I got out, that is 2009/2010 and we had some interesting tales to swap. He was amused by the terms I used for what he thought was cutting edge and I got a ton of updated information that would be wearisome to find on my own. For example, he recommends I switch from CNET to MajorGeeks for my free software. I agree because I’ve been stung by CNET a few times. (CNET claims to check for viruses, but too often does not spot intrusive advertising and millennialware as viruses.)
2019 Brazilian event.
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The rain continued, so during a let-up I put some shingles over the septic pipe and noted it is draining just fine. I filled in some 65% of the length, still wary of the section that joins the tank. I need to patch that hole. The pipe turns out to be an inch more than anything spare I have in my now unwieldy inventory. Drain lines are an easy repair and I drilled from the top, meaning with any patch I don’t expect issues, I may even just heat gun something into shape.
Investment. Discouraging as this may sound, remember that if you are successful at this, chances are you will live long enough to reap the rewards of sacrifices now. Learning to track your own investments is, most sadly, a topic they don’t tell you about and even then, both the big and small pictures on this are fraught with misconceptions. Some weeks ago I mentioned the folly of relying on others to monitor your money. Today, I refine that a bit more.
If you invest in anything you have to do, as in work, you are not so much investing as buying yourself a job. Several years ago, I purposely tried a couple of the more promising Internet “businesses”, book publishing and surplus tax. Both were rackets in a way that they were not mature thought-through businesses. You had to supply a lot of management skills most people do not have (and which I dislike) and also put in long hours or put in longer hours to get others to do the legwork. Any investment like that is going to flounder as you age, either from the increased activity or the stress factor.
Thus, I mean money investing. Take the concept of “cash crop” to the financial field. The popular concept of investing is getting wealthy enough to sit around a boardroom making executive decisions in a world of swirling priorities. I say no, do what you make the most cash at now and I’ll tell you how real management works. This does presume you eventually get to where you operate at a surplus and that your money, once invested, stays invested. It’s a hurdle I had to cross and I know it is not easy.
My first rule remains do not invest in anything that you do not understand. If you are over fifty in particular, don’t invest in anything that will give you a headache or a backache. Here’s how it really works. You have to strive to be right more often than average, but not right all the time. Money invested makes two categories of return. First is interest, which goes by many names due to differing tax treatment. The other is an increase in value of what you invested in, usually called a capital gain.
One basic is open a bank account that is separate and never overlaps any part of your lifestyle. You never intend to withdraw any money from this account—except to invest it. Make a list of the investments you understand. My choices are CDs, money market accounts (not money market funds), and good old Caltier, a REIT (rhymes with Pete). Find the minimums you need to get into each investment. For example, my CDs are minimum $1,000. Money accounts are $2,500, and Caltier we know after months of research was just $500. You will learn soon enough to put at least $20 per payday away. If you are a beginner, you have no idea how important this is now. I’m super-glad I kept my books to the third decimal point.
Later, now that you’ve made the investments, what is it you actually have to do? And that is the scope of today’s lecture. You learn to watch. Either you learn to watch or you will wind up having to pay somebody to do it for you. These days, there is nobody you can trust. What you actually wind up learning is to make small investments based on what you know now. Forget about being right or getting lucky, keep up a small regular pattern of investing. This is what the Reb reports, she may not yet realize how important it is.
Make each investment in a way that you can watch it. The actual activity you will do is review. On a regular basis, review each investment you made and compare it to what you had planned. The interval is around a week. That is, once a week take a peek at every investment, every account, everything where you have money. If you are wise, write down a log of the totals. Most investments move on a monthly cycle, so checking weekly keeps you on top of things. Make this chore as convenient as possible. Because, when you are 80 you will have nothing but thanks for taking my advice on this.
For example, I had a small CD mature on the 24th. My calculations last June said $28.90, but the Reb reports it was $29.21. Here is a fork in the road. You could say what’s 31¢ or you could say it is very important that you know about it, and what caused it. And that is the bulk of how managing your own investments goes. Making small moves at a time, and watching them on a weekly basis. Myself, on a new investment, I sometimes check daily (Caltier), then later less often when I know how they operate. They are, for example normally late paying the month-end dividend.
As for the 31¢, I know what caused it. And that is more important than you can imagine—just ask anyone who used to work at Enron. When I inquired about the maturity value two weeks ago, the clerk on the phone read the present value on her monitor. The extra money was from that time to the final day. Now we know more than the clerk, and is knowing these things important? Well, I’m the one that retired 24 years earlier than the pack. You decide. Near most year-ends you get these little posts of good advice.
ADDENDUM
I’m not sure I should post the following material, but I’ve detuned it so the people involved cannot be determined. I’ve got a few acquaintances I only talk to once a year around this time. Let’s just say 2023 has affected others far more than myself—and there is a common thread. That’s the part I’m talking about. My regard for infrastructure is well-known, I have little patience for people who are poor “because they disagree”. Fact is, the other extreme is also present a little too often. People who get easy money through luck or inheritance too often fail to build infrastructure, many not even realizing what it is. But woe to the person who points out to them that is because they got it free from their parents. You’ll get your head bitten off.
It now seems that lack of underpinning is shaking things up for people I regarded as “rich” but now not so much. Among the horror stories I’m getting are these gems.
One guy had his entire fortune tied up in a mall. This year he had to sell the mall at a $1.5 million loss over a $200,000 debt he didn’t have the cash to pay. Another, who I thought would never gamble, lost $35,000 on crypto-currency. Yet another put all his extra cash into the hands of an uncertified financial planner who is drilling for oil in Texas. These are not wise moves in the first place, but demonstrates both the lack of infrastructure and the long-term effect of easy money. People who have it tend to believe they are charmed and can take chances.
One off-shoot of that is they also rationalize that larger investments pay off better. That a fund with a minimum $50,000 buy-in weeds out the risk element for them. This week I got plenty of the above type of news. I immediately called JZ because he’s squarely in that category with the major difference is he knows he missed the investment boat. He’s aware of the pains I take to protect an investment, admitting that until he saw me do it, never gave it a second thought. Through his family, he knows many investors who he now realizes also didn’t protect themselves. And that is what we were on the phone for nearly an hour.
I had called to rib him that I had made more money than he did doing plumbing work in 2023. He just laughed saying that is nothing. He listed ten or so people who lost money that he knows of, many of them making really dumb moves. Dumb, because he recognizes the patterns I warned him about. It seems some of them took serious hits which also got me to conclude they were not as rich as I thought in the first place. The fund with the $50,000 minimum is a true example that now looks like that was a total loss. JZ is aware of the months I spent finding Caltier with a $500 buy-in. Now he knows why.
In related news, I had a CD mature in Canada, but left it there since July. It made $44 interest, even with the exchange, that beats Caltier. Let me think this one through. I’ve done currencies before and overall, lost money. As you know, I call such losses “tuition”.
